Mechel announces the commissioning of a new sinter plant at Chelyabinsk Metallurgical Plant

Mechel announces the commissioning of a new sinter plant at Chelyabinsk Metallurgical Plant

Moscow, Russia – April 20, 2005 – Mechel (NYSE: MTL) announces the startup of the first line of the new sinter plant at its subsidiary, Chelyabinsk Metallurgical Plant.

Construction of the new sinter plant is in line with Mechel’s strategic investment program, targeted at improving quality, lowering production costs and overall modernization. The plant will have a total annual capacity of 4.5 million tonnes of sinter once it is brought fully on line, which is expected by the end of this year.

The new sinter plant significantly exceeds the existing sintering facility in efficiency and technical parameters. Environmental protection was also one of the foremost priorities of the project, and substantial sums were spent to ensure that the plant exceeds all applicable standards. For instance, the sintering machines are equipped with modern dust-gas filtering systems, electrical filters produced by Alstom.

The first line has a capacity of 1,125 million tones. The three additional lines of the sinter plant will be commissioned in roughly equal periods throughout the rest of this year. The commissioning of the new plant significantly increases Mechel’s ability to internally source its iron ore requirements for its own iron ore mine, Korshunov Mining Plant. The plant, once fully commissioned, is expected to yield cost savings of approximately $70 million annually. The total cost of the project is expected to be approximately $150 million.

“Construction of the new sinter plant is a part of our strategic program to upgrade our production facilities. The commissioning of this sinter plant will allow us to realize substantial cost savings through the further integration of our operating subsidiaries, and is yet another example of how our vertical integration provides us with significant competitive advantages,” – Mechel’s CEO Vladimir Iorich said.


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Mechel OAO
Irina Ostryakova
Director of Communications
Phone: 7-095-258-18-28
Fax: 7-095-258-18-38
irina.ostryakova@mechel.com


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Mechel is one of the leading Russian metals and mining companies. The Company unites producers of steel, rolled products, hardware, coal, iron ore concentrate, and nickel. Mechel products are marketed domestically and internationally.


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Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel Steel Group, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel Steel Group files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned «Risk Factors» and «Cautionary Note Regarding Forward-Looking Statements» in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.

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